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Nonprofit Marketing: Calculating and Proving ROI

Nonprofits, like many organizations, can struggle with getting a marketing budget that allows them to do everything their marketing team wants to do – or sometimes needs to do – to bring in the most qualified leads.

So if you are working with a small budget and have big goals, how do you ensure you’re getting the most for your money? Traditional marketing methods such as print, direct mail, radio, billboards and television aren’t capable of reporting ROI like digital marketing can – and can come at a much higher price point. Before you run a digital marketing campaign, you will want to sit down with your nonprofit marketing team and discuss what your SMART (Specific, Measurable, Attainable, Relevant and Time-bound) goals are and how you define success.

Setting Goals

Are you looking for more members? More donors? More volunteers? A larger email database? Once you determine what success means to your organization, figure out what metric of measurement aligns with the end goal. Let’s look at the following example.

SMART Goal of organization:

Increase donations by 10% by the end of the next fiscal year

How we measure success:

Increase in the number of physical donors –or- increase in the amount donated by current donors

At the current average donation of $166 you will need 31 more donors this year

At the current number of donors you would need each to donate an additional $17.33 per donor or a total of $183.33/donor

Tracking Metrics

To track these metrics, you will want to set up a Google Analytics account and start tracking conversions on your donation page. To make sure you are only seeing the traffic that can be directly attributed to your campaign set the traffic source to align with the mediums you used in your campaign. For example, if you are running a Facebook campaign for donations, you will want to track how much traffic came in from Facebook (set source/medium as social and look for Facebook) and then converted on your donation page.

Calculating ROI

Now you know what your goals are, what you should be tracking, and how to track it. But how do you show ROI to those people in your organization who are breathing down your neck for results? ROI in digital marketing can be easily shown through the following formula:

ROI = (Incremental Profit – Campaign Cost) / Campaign Cost

Taking the previous example into account, let’s say you spent $10,000 in marketing efforts for the fiscal year. Your total donations were $57,000 for the year, with $35,000 directly attributed to your campaign according to Google Analytics. So your calculation of digital marketing ROI would be:

ROI = (35,000 – 10,000) / 10,000 = 2.5

With this calculation, you are showing a 250% ROI for your digital marketing campaign.

Get Help with your Nonprofit Marketing

Although there are for-profit companies that spend hundreds of thousands, even millions of dollars annually in the digital marketing world, there are many cost-effective ways digital marketing can be used for a nonprofit.